Leader-Member Exchange Theory

One of the never-ending challenges associated with providing leadership is that we are all human and have our own biases and opinions. Even if you take pride in being a leader who is fair and you do the best you can to remain impartial and keep your personal feelings out of the equation, it is human nature to let yourself be swayed by emotion. Dealing with certain team members in a different manner than others is a natural behavior, but it is also one that could hurt the performance of your team in the long run.

The Leader-Member Exchange Theory looks at this phenomenon and how your own personal opinions could end up limiting the opportunities that an individual has to succeed under your leadership. While it might be difficult to look at yourself and your own management style in a critical light, it is important to do so from time to time.

By taking an honest overview of what you are doing as a leader, and how you are treating all of your team members, you can improve your own performance over time - in addition to the performance of your organization.

Three Relationships Throughout the progression of your time with specific team member, you are likely to work through three different 'relationships' with that person. Each of these stages is important, and takes time to develop naturally. If you think back to relationships that you have had with previous employees, you probably can identify these stages and remember how they developed over time.

• Role-taking. This is the very start of the relationship, when both the manager and the employee are just starting to get to know each other. Naturally, the employee won't bear very much responsibility at this point in the process, and their tasks will be relatively simple and limited in scope. It is during this period of time that the manager will be able to observe what the employee is capable of and then use that information to hand out future responsibilities.

• Role-making. At this point, the relationship is at its critical stage where employees will either earn the trust of the manager, or lose it - maybe forever. Most commonly, managers will put employees into one of two categories, without even thinking about it. These categories are called 'in-group' and 'out-group' in this theory. Those who land in the in-group are trusted by the manager and are likely to increasingly earn promotions and further responsibilities. Those pushed into the out-group tend to get stuck where they are, doing the same tasks over and over again. It is important to note that these 'decisions' are usually made on a subconscious level, and the manager might not even be aware that he or she has grouped their employees in this way.

• Routinization. Finally, a routine is established in which the manager and employee generally know what to expect from each other. This is good news for those who are in the in-group, as they will tend to remain in that position even if their actual performance isn't worthy of the position. On the other hand, this is a bad thing for the out-group, as they are now going to have a hard time breaking the routine and impressing their manager. Employees who fall into the out-group routine of doing the same thing day after day often end up leaving the group or asking for a new position within the organization to get away from the manager that has 'given up on them'.

What Can Be Learned
For a manager, the ideas put forward in this theory are important to recognize and consider. If there are subconscious decisions being made that are categorizing employees on potentially incorrect grounds, it could be compromising the overall potential of the group. Ideally, the evaluation of employees would be strictly on concrete, objective grounds that leave personal feelings and opinions out of the mix. One of the best things any manager can do is look in the mirror critically and make sure that they are being fair to all of their employees to the best of their ability.

To learn from the Leader-Member Exchange Theory and actually improve performance, it is helpful to make sure and review every employee on a periodic basis and make sure that you are being fair to them - and that they are holding up their end of the bargain as well. By completing periodic reviews, you might find that you realize you haven't been giving a specific employee enough credit for the work they are doing, and that they deserve to be considered one of your top team members after all.

On the other side of the coin, employee reviews are a powerful way to help you realize that some people on your team might not be as high achieving as you thought. This is often the case with someone who starts strong within the first few months of being on your team. That positive first impression can carry them a long way, even after they have stopped performing at such an impressive level. If a particular employee figures out that they are on your 'good side', they might take advantage of the situation and let their performance slide, knowing that you are partial to them as compared to other members of the team. Just as those who are in your out-group deserve the chance to move up, those in the in-group need to be constantly evaluated to ensure that their reputation in your mind is warranted.

Being a manager is all about relationships, and those relationships inherently have human biases and flaws. By taking an objective look at each individual on your team from time to time, you can ensure that you are being fair to them and not pre-judging their work based on things that may have happened years ago in the early stages of their employment. Looking at your own leadership with a critical eye is an important skill, and the Leader-Member Exchange Theory can help you do just that.

The Leader-Member Exchange Theory looks at this phenomenon and how your own personal opinions could end up limiting the opportunities that an individual has to succeed under your leadership.

Throughout the progression of your time with specific team member, you are likely to work through three different 'relationships' with that person.

Role-taking occurs when team members first join the group. Managers use this time to assess new members' skills and abilities.

During Role-making managers sort new team members (often subconsciously) into one of two groups, known as the 'in-group' and the 'out-group'.

During Routinization, routines between team members and their managers are established.

A limitation of leader-member exchange research is that it is not particularly helpful in describing the specific leader behaviors that promote high-quality relationships as it only implies generalities about the need for leaders to show trust, respect, openness, autonomy and discretion.